Real Estate regulator in India – A Perspective

Real Estate regulator in India – A Perspective

I entered the realty industry on a promise, in 2005, when I came back from U.S.. As someone with a prolonged stint in the corporate world, I was always impressed with the numbers, esp. the size of the market, the employment & innovation opportunities, the healthy growth rate, the pent-up demand and the investment opportunities.

However, the last 5 years haven’t been exactly as it was planned, both personally, as much as for the industry. When the Industry was on a roll, it resisted regulation of any sort, as was wont. The common wisdom as typical American – “why fix something when it isn’t broke”. (though America boasts of one of the best regulated Real estate Industry).WHY SO???

Let us compare the Telecom Industry, which is comparatively younger in India. Within the last 20 years or so, the Industry has grown multi-fold by increasing consumption, offering cutting edge products and services, as well as has a singular authority regulating the Industry and setting benchmarks for the future.

The very mission of TRAI announces: “The mission of Telecom Regulatory Authority of India (TRAI) is to ensure that the interests of consumers are protected and at the same time to nurture conditions for growth of telecommunications, broadcasting and cable services in a manner and at a pace which will enable India to play a leading role in the emerging global information society”.

Cut to the real estate industry : The real estate Industry is functioning under no singular guidelines, respective states and organizations carry forward the business as it “presumes” good for the Aam-aadmi, the Aam-Aadmi is still hoping for salvation, there are no benchmarks and set standards, and most of all, an industry forecasted to grow to almost 100 billion dollars in size, seems headed in multifarious directions.

Critics, players of the Industry and part of the political class argue that the appointment of a regulator is not the solution. Per them, the diversity of the country, the fragmented polity, the governance of different states by different political parties etc. demands a much more localised governance and that one unifying body would be akin to creating a ‘toothless’ tiger. But sir(s), can we create a single starting point? Can we have one direction wherein we can all head to? Can we adapt to tried, tested, best practices already enforced elsewhere in the world? Can the same India be any different in the realty industry compared to the IT, Telecom, services industry? Can we have a level playing field for all existing as well as intending players? Can we try and Possibly, vested interest and the lack of a coercive will is the biggest reason. The Mango people (aam-aadmi) deserve to remain a fruit to be milked of their juices, in the eyes of the policy maker. How come that we have certain norms in “A” industry, and can’t be enforced in the Real estate Industry? A clear indication that the Industry is not unified, and that the policy makers have a “VALID” reason not to enforce a singular norm across the country / Industry.

The unfortunate direct loser of this apathy is the consumer; followed by the Industry @ large, which seems myopic in intent.

No better time than today to enforce this… bring in a regulator for the real estate industry in India. The benefits would run across the spectrum. The central government would miss the chance to string all the states, either by conviction, or coercion, if not availed now.

The 100 day agenda of the Ministry of Urban development released vide the press release on the 29th June’09 mentions this :

Point # 16 Real Estate Regulator for Delhi – Real Estate Management (Regulation & Control) Bill for NCT of Delhi will be taken up for decision.

If Delhi is serious, and rolls out a credible implementation plan, that would be the precursor of the regulator pan-India.

It is time we seriously considered “Consumer interest”, rather than keep trying to paint the Donkey to look like the Zebra.

The author is Ajay Dabas Founding Partner of Certes Realty Ltd. & the views expressed by him are of his own.